Other Nations Lash 'Protectionist' Drift in U.S. Trade Policy

JOEL HAVEMANNTIMES STAFF WRITER

Even as President Bush seeks the political high ground as a free trader, a review of U.S. trade policies by the world's trade overseer has found the Bush Administration increasingly protectionist in its approach to international trade.

In a report and in a series of meetings, the Geneva-based General Agreement on Tariffs and Trade accused the United States of everything from unfairly imposing high duties on Canadian-assembled Hondas to using environmental standards to keep foreign tuna off supermarket shelves.

"It was a pretty critical review, I have to tell you," said Roderick Abbott, one of the European Community's chief trade negotiators. "It gave everybody a chance to let off steam."

The forum for the America-bashing was a two-day meeting sponsored by GATT, the organization that oversees the world's international trading system. The sessions put Bush on notice that the rest of the world is watching as pressure mounts during the U.S. presidential election campaign to provide ailing American industries with protection from foreign competition.

At the end of the meetings, Rufus Yerxa, the chief American trade negotiator in Geneva, insisted that protectionism "is not the Administration's policy or approach."

Still, said Yerxa, "we're willing to take our lumps"--noting that America will have a chance later this year to hit back at Japan and the European Community. The GATT reviews the trade policies of all major members about once every two years.

Preceding the closed meetings in Geneva, at which about 20 countries lambasted U.S. policies, the GATT's own staff circulated a report cataloguing alleged U.S. transgressions. "Concern about the erosion of basic GATT principles by regionalism, bilateralism, unilateralism or various forms of 'managed' trade is increasing," the GATT staff wrote.

The review of U.S. trade policies came as negotiations toward a new, more liberal set of rules governing international trade remains all but deadlocked over U.S. insistence that the European Community dismantle its complex web of subsidies for farmers.

At this week's review in Geneva, however, America's farm subsidies came in for a drubbing. Chile's ambassador to GATT, Ernesto Tironi, criticized the 1990 U.S. farm law, which authorized an extra $1 billion to subsidize U.S. farm exports if a new international trade agreement is not reached by June 30 of this year.

Canada's GATT representative, Gerald E. Shannon, said the United States already guarantees its farmers that they will be paid more than world market prices.

"Such government intervention has tended to insulate U.S. farmers from international market forces," Shannon said, "while causing hardship to Canada and other efficient producers by driving down world prices."

Yerxa responded that U.S. subsidies--at 30% of farmers' incomes--are low compared to the EC's 45%.

Canada also renewed its protest of two recent U.S. trade actions--a Commerce Department recommendation that duties be slapped on subsidized Canadian softwood lumber and the Customs Service's imposition of duties on Canadian-assembled Honda cars, which the agency said had too many non-Canadian parts.

While those decisions have increased tension between the United States and Canada over interpretation of their free trade agreement, the pact itself--as well as negotiations between the United States and Mexico toward a similar accord--was the target of criticism from Japan and the GATT staff.

"The single most visible and perhaps most important development in U.S. trade policies during the last two years is in the Administration's attitude toward preferential regional trade agreements," the GATT staff wrote.

The European Community also protested potential discrimination, not from the regional trade accords--the EC itself is a 12-nation trading bloc, after all--but from U.S. efforts to manage its commerce with its major trading partners, notably Japan.

Abbott, the EC's trade negotiator, pointed in particular to Japan's agreements to open its markets to U.S. auto parts, computer chips and building contractors. "Our fear is that the EC will be discriminated against," Abbott said.

Abbott also objected to the U.S. decision to ban Mexican tuna because of the danger to dolphins from Mexican fishing practices, branding the ban a unilateral action inconsistent with the multilateral trade accords signed by the GATT's 103 members.

The ban extends to all nations that fail to certify that none of their canned tuna comes from Mexico. "We're simply not willing to certify that," Abbott said.

Abbott and others expressed alarm over protectionist legislation in Congress during a period when a recession has aggravated American concern over competition with imports.

"The combination of the recession and the presidential election campaign makes one feel uncomfortable," Abbott said.